What if that Grand Prairie resident, or someone from Fort Worth, Arlington, Dallas, or out in Weatherford gets a bunch of money in an insurance settlement. That’s a good thing, Right? Well maybe not. It depends on whether or not there were any subrogation interests involved and whether or not those subrogation interests were properly handled.
USLEGAL.com defines subrogation as the substitution of one person in the place of another with reference to a lawful claim or right.
Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages.
Subrogation places one party in the place of another so that the new party gains the rights of the former party regarding a claim. This is stated in the case, Hartford Casualty Insurance Company v. Albertsons Grocery Stores, a 1996, Fort Worth Court of Appeals case. In this context, the insurance company or insurer “steps into the shoes” of the insured to pursue a claim against the wrongdoer.
As explained in the case, In re Romero, in 1997, by the San Antonio Court of Appeals, the insurer’s payment creates the right; the insurer acquires its subrogation rights once it pays the loss.
All of what has just been said most normally arises in the context of a personal injury claim. The injured person has their own insurance pay benefits and then goes after the insurance of the person or company who caused their injury. In Romero, a plaintiff sued a defendant in county court for damages arising out of a car wreck. Her insurer intervened in the lawsuit and alleged that it had paid all or part of her damages and was thus subrogated to her recovery against the defendant to the extent of its payments. She then refiled her case in district court, and the county court dismissed the case with an order disallowing it to be refiled. The appeals court held that the dismissal did not extinguish the insurer’s subrogation claim. From the point of payment forward, the court noted, the viability of the insurer’s part of the cause of action does not rise or fall with the fate of its insured’s part of the cause of action.
The important thing to know about subrogation is that when a subrogation issue is present, an experienced Insurance Law Attorney must be consulted. An attorney who is used to dealing with these subrogation issues will make sure they are handled properly so that the insured does not have to worry about being buried in legal issues that would arise when the subrogation is not properly handled.
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